Australian rare earths producer Lynas is partnering with South Korea’s LS Cable & System to explore a new metals plant in Vietnam, marking a pivotal step in building a resilient, non-China supply chain.
This strategic move is not a sudden decision, but the result of three powerful forces converging. First, the economics have become compelling. Prices for key rare earths like Neodymium-Praseodymium (NdPr) have nearly doubled since mid-2025, significantly improving the profitability of converting raw oxides into higher-value metals. Second, new government policies, particularly in the U.S., have created price floors that reduce investment risk for producers outside of China. Third, LS Cable has a clear strategy to build a value chain from Vietnamese metal to a planned U.S. magnet factory, creating a ready-made customer for the plant's output.
The foundation for this venture was laid by several crucial recent developments. In early March 2026, Lynas secured a 10-year renewal of its operating license in Malaysia, removing a major source of uncertainty. Almost simultaneously, it extended a supply agreement with Japan Rare Earths (JARE) to 2038, which included a guaranteed price floor for its NdPr. This combination of operational and financial de-risking transformed the Vietnam plant from a speculative idea into a financeable project.
Geopolitics is the overarching driver, however. China’s export controls on rare earth elements, first imposed in 2025, sent a clear signal to global manufacturers about the risks of over-reliance on a single supplier. While a temporary pause on further controls is in effect until November 2026, companies are racing to establish alternative supply routes before that window closes. The Lynas-LS partnership is a direct response, aiming to create a durable, Asia-based production hub independent of Chinese policy shifts.
This partnership represents a perfect strategic fit. LS Cable, through its subsidiary LS Eco Energy, had already committed to building a metallization facility in Vietnam. Its goal is to feed these metals to a new magnet factory in the United States to serve the growing EV and defense markets. By securing a stable supply of oxides from Lynas, a world-leading producer, LS Cable solidifies its entire value chain. For Lynas, it’s a logical step in downstream integration, moving from simply selling raw materials to capturing more value by producing finished metals.
In essence, the Vietnam plant serves as the critical bridge connecting Lynas's de-risked oxide production in Australia and Malaysia with LS Cable's ambitions to manufacture high-tech magnets in the U.S. It’s a commercially sound move, underpinned by strong prices and long-term contracts, that strategically strengthens the global rare earths ecosystem.
- Rare Earths: A group of 17 metallic elements crucial for high-tech products like electric vehicles, wind turbines, and defense systems. Neodymium (Nd) and Praseodymium (Pr) are key components of the world's strongest magnets.
- Downstream Integration: A business strategy where a company expands its operations to take on activities further along the supply chain. For Lynas, this means moving from mining and processing oxides (upstream) to producing metals (downstream).
- NdPr: An abbreviation for Neodymium-Praseodymium, an alloy of two rare earth elements that is the primary raw material for high-performance permanent magnets used in electric motors and other advanced technologies.